Measuring Your Social Media's ROI

More and more businesses are adding social media to their Internet marketing strategies. But, according to a survey conducted by Mzinga and Babson Executive Education, 84 percent of marketing professionals who use social media in promotions don't currently use any tools to calculate the return on investment (ROI) on social media.

Considering that building and maintaining blogs, Twitter profiles and Facebook pages takes an investment of time, energy and money is simply one reason to keep track of the performance of your company's forays into social media. Measuring and monitoring the performance of your social media against your revenue also helps you measure the effectiveness of your strategy over time.

To measure ROI, you will need to follow this basic formula:

(Revenue from your investment – Cost of investment)


Cost of Investment


Cost of investment equals the money and resources allocated to building a web presence. Revenue from your investment is equal to the extra amount of revenue generated from your social media efforts. To determine these figures, try the following procedure:

  • Examine pre-social media figures. Look at sales revenue, website visitors, number of transactions and other key performance indicators before blogs and social media profiles were in place.
  • Determine key web metrics. These figures will depend on what type of social media you are using, but consider looking at social media followers, blog comments and blog visits as well as blog-to-website visits.
  • Establish timelines. Decide on regular time intervals in which to examine sales and web metrics.
  • Combine sales and web data. Examine performance data along your established timeline and look for patterns.

By correlating your sales and web efforts, you can get an idea of the relative success of your social media program. This data can also be used to amend your social media strategy as necessary.

Thankfully, there are quite a few tools to help track your growth on the web. Here are a few to consider:

  • Google Analytics – This free program allows you to examine a wide range of customized website data.
  • HootSuite – In addition to helping you manage multiple social media platforms in one place, HootSuite also provides comprehensive web analytics.
  • ViralHeat – This inexpensive social media monitoring program provides daily e-mail reports on key statistics in real time.

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